Several of New England’s tech and life sciences firms got juicy deals the past week and a half.

—Boston’s RunMyErrand, an online clearinghouse where busy people can find helpers for odd jobs, raised $1 million in a Series A venture financing round. The cash, from California investors Baseline Ventures and Maples Investments, will help the startup staff up and expand to San Francisco.

—Cambridge, MA-based Cequent Pharmaceuticals raised $3.35 million in the first tranche of its second venture financing round; the round could eventually total $15 million. Cequent, a developer of RNA-interference based drugs, raised $15 million in its 2007 Series A round from Ampersand Ventures, Pappas Ventures, Yasuda, and Novartis Option Fund.

—Pulmatrix raised $30.2 million in a Series B venture round led by Arch Venture Partners and Novartis Bioventures Fund and joined by Polaris Venture Partners and 5AM Ventures. The Lexington, MA-based startup is developing drugs that prevent a variety of microbes, including influenza, from infecting the lungs.

—GTC Biotherapeutics (NASDAQ:GTCB) of Framingham, MA, raised $10 million in a sale of stock to French biotech drug maker LFB Biotechnologies, already a major shareholder

—Waltham, MA-based On-Q-ity, a developer of cancer diagnostic tools, reportedly raised $21 million in a Series A round of venture capital from Mohr Davidow Ventures, Bessemer Venture Partners, Physic Ventures, and Northgate Capital. The startup was formed through the merger of two Mohr Davidow portfolio companies, CELLective Diagnostics and The DNA Repair Company.

—Boston’s Flybridge Capital Partners helped funnel $3.4 million into New York-based open-source database developer 10gen. Returning investor Union Square Ventures also contributed to the Series B round.

—Special effects software startup GenArts of Cambridge, MA, acquired St. Louis, MO-based Wondertouch, whose software generates so-called “particle-based” special effects. Financial terms of the deal were not disclosed. Wade took a fun look at the companies’ technologies.

—We got the inside scoop last week at our Xconomy event on pharmaceutical innovation when Boston-based Enlight Biosciences revealed that it struck a deal with Abbott Laboratories (NYSE:ABT). Abbott agreed to join the consortium of big pharmas that are …Next Page »

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Ion Torrent Systems, a company advised by Harvard University genomics pioneer George Church, has raised $23 million in new capital to develop what it calls on its website “groundbreaking and highly disruptive technology” and to hire people who “want to do what it takes to put a dent in the universe.”

The company, which has a location near Yale University in Guilford, CT, and one in San Francisco, has raised $23 million in equity out of a financing round that could be worth as much as $26 million, according to a regulatory filing released today.

The document doesn’t say who invested, and Ion Torrent didn’t immediately respond to a request for comment. But the new company is associated with some big names, including Church and Stanford University’s Ron Davis, who serve on the company’s scientific advisory board, and CEO Jonathan Rothberg, who was the founding CEO of 454 Life Sciences before that company was sold to Roche two years ago for $140 million in cash.

Ion Torrent Systems website is pretty vague about what it is really up to, although its job postings offer some clues. It says it is looking to hire molecular biologists and biochemists to do the aforementioned universe denting, and that it offers that it offers the opportunity to work with top scientists “and have a profound impact.” It is also looking to hire software developers and “evangelists” who want to “create the biotech software platform of the future and share it with the world. Build powerful tools and create a tight-knit community that will use and develop them for years to come.”

GenomeWeb speculated back in March, based on a patent application filed by Ion Torrent Systems, that it is working on new DNA sequencing technologies, although the company wouldn’t confirm that. Major players in the field—such as Carlsbad, CA-based Life Technologies, San Diego-based Illumina, and Roche—have been in a competitive frenzy to lower the cost of sequencing full human genomes. One Mountain View, CA-based startup, Complete Genomics, raised $45 million in venture capital earlier this year to support its new model for sequencing entire genomes for as little as $5,000 apiece or less.

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It was a busy week in the land of New England life sciences. Let’s dive in.

—Luke did a massive analysis of the financial health of all the public biotech companies we follow the Boston area and the news… Well, it wasn’t good.

—Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ:VRTX) brought in $155 million in cash by selling $120 million in debt and $35 million for the rights to potential milestone payments. Both deals were related to the potential European commercialization of telaprevir, Vertex’s experimental drug for hepatitis C.

—Adimab, a Lebanon, NH-based biotech startup developing a new platform for discovering antibody drugs, raised $8.2 million in a Series D round of venture financing. Google Ventures led the financing and Polaris Venture Partners, SV Life Sciences OrbiMed Advisors, and Borealis Ventures participated as well.

—Merrimack Pharmaceuticals of Cambridge forged a co-development and co-marketing deal with French pharmaceutical firm Sanofi-Aventis. The partnership, focused on Merrimack’s antibody cancer drug MM-121, will bring the Cambridge firm $60 million upfront and as much as $470 million more in milestone payments, not to mention double-digit percentage royalties, should the drug reach the market.

—Luke chatted with Peter Hecht, CEO of Cambridge -based Ironwood Pharmaceuticals, which recently recruited former Genentech CFO David Ebersman to its board. Does the move signal that Ironwood—whose lead, potential blockbuster, drug is in late-stage clinical trials—is preparing to go public? Hecht wouldn’t say so, but Luke explains why Ironwood might fare well on Wall Street.

—The FDA followed an earlier advisory panel recommendation that clofarabine (Clolar), a leukemia drug from Genzyme (NASDAQ: GENZ), not be approved for use in a broader population of patients. The agency said that Cambridge-based Genzyme should conduct another trial of the drug in patients over age 60; it’s currently approved just for children with leukemia.

—Ryan spent the day at the MassBio Investors Forum in Boston, checking in with folks from Cambridge-based RNAi-drug developer Alnylam Pharmaceuticals (NASDAQ:ALNY), (which referenced a potential spin-off company perhaps in the works); Waltham, MA-based EyeGate Pharma (which has rounded up $12 million of a planned $20 million to $25 million financing); Cequent Pharmaceuticals, another Cambridge-based RNAi-drug developer (which is moving its first drug into clinical trials); and Pathogenica (a brand-new diagnostics firm spun out of George Church’s lab at Harvard Medical School). He also gleaned some insights (and arguments) about the future of biotechnology from Harvard Business School professor Gary Pisano and life sciences investment firm CEO Steven Burrill.

—Epizyme, a Cambridge startups out to turn the science of epigenetics into new drugs that work by turning genes on and off, raised $32 million in a Series B venture round led by Bay City Capital. Amgen Ventures, Astellas Venture Partners, MPM Capital, and Kleiner Perkins Caufield & Byers participated as well.

—Boston-based antibiotic developer Paratek Pharmaceuticals struck an exclusive development and commercialization deal with Swiss drug giant Novartis. The deal, which could be worth as much as $485 million in initial milestone payments, focuses on Paratek’s PTK 0796, which is in late-stage clinical development for treating complicated skin and skin structure infections as well as certain cases of pneumonia.

—Immuneering, which is developing computer models to predict patients’ responses to cancer drugs, became the first life sciences startup to join Polaris Venture Partners’ new Dog Patch Labs startup incubator in Cambridge. The move will take the company out of CEO Ben Zeskind’s apartment in Boston’s Back Bay.

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Alnylam Pharmaceuticals (NASDAQ:ALNY) had more than $470 million in the bank as of the last official count at the end of June, so it struck me as odd that the Cambridge, MA-based developer of gene-silencing drugs was a presenter along with dozens of cash-starved biotech startups at the MassBio Investors Forum in Boston yesterday. Alnylam and its poorer biotech counterparts made some interesting buzz.

While Alnylam is richer than the vast majority of biotech firms, the company still appears to have a thirst for new alliances. The firm, which is a leading developer of RNA-interference (RNAi) drugs, already counts Roche, Novartis, Takeda, and Medtronic among its bevy of collaborators. And Barry Greene, president and chief operating officer of Alnylam, told the folks at MassBio to expect more major alliances to surface in the coming months—the company told investors in January that it aimed to close at least two more major new alliances in 2009.

Alnylam dropped some hints yesterday about its plans to spin off another startup akin to Carlsbad, CA-based Regulus Therapeutics, which was founded by Alnylam and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ:ISIS) as a joint venture for developing microRNA drugs in 2007. Alnylam CEO John Maraganore told Xconomy back in February about a number of other technologies inside Alnylam with spinoff potential, like methods for enhancing stem cells for regenerative medicines, or immune-system compounds called adjuvants, that can boost the potency of vaccines.

Greene said there could be another “Regulus-like” deal in the works at Alnylam. When I pressed him for details after his presentation, he demurred yet did reiterate that his company, which is already pursuing the development of biological drugs that mute disease genes, has an interest in doing more in the vaccine and stem cell fields. While this mysterious “Regulus-like” deal now exists as speculation, it could be interesting to see how Alnylam finds new ways to reap value from its existing portfolio of drug candidates or RNAi patents. Such joint ventures enable companies to explore new areas without taking on all the financial risks associated with drug development on their own. For sure, Greene’s comments will likely stir up gossip about potential deals in the works at Alnylam.

Besides Alnylam, other Boston-area life sciences firms that made pitches at MassBio appeared to be making progress. Here are several tidbits that I gathered about EyeGate Pharma, Cequent Pharmaceuticals, and other firms during my travels at the annual investor conference:

—Stephen From, CEO of Waltham, MA-based EyeGate Pharma, said his existing venture investors have committed …Next Page »

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Complete Genomics, the Mountain View, CA-based company that says it can sequence entire human genomes for as little as $5,000, has pinned down a $45 million venture round which includes support from two of its founding backers—Kirkland, WA-based OVP Venture Partners and San Diego-based Enterprise Partners Venture Capital.

The rest of the capital is coming from Prospect Venture Partners, Highland Capital Management, and a pair of new life sciences investors with deep pockets—Essex Woodlands Health Ventures and OrbiMed Advisors. It’s the fourth round of financing for Complete Genomics since it was founded in 2006, and brings its financing total since inception to a little more than $90 million. The company plans to use the money to continue building what it says is the world’s largest commercial human genome sequencing center, in Silicon Valley.

The genome sequencing field has been on an audacious drive to get better, faster, and cheaper, and Complete Genomics has made some of the boldest predictions on how far it can push the frontiers. The company made headlines last October when it declared it intended to start sequencing full genomes this year for as cheap as $5,000, and deliver them in as little as four days. This would be an astounding leap forward in democratization of genome sequencing, which until recently has been so costly and time-consuming that only a handful of genomes have ever been completely sequenced. If the technology were made more widespread to do that, researchers say, it could shed valuable light on how small, individual variations in genetic code can lead to diseases.

Complete Genomics plans to make this possible partly through proprietary sequencing technology and with a different kind of business model. The established players—Carlsbad, CA-based Life Technologies, San Diego-based Illumina, and Switzerland-based Roche—make money by selling expensive equipment and supplies to researchers. Instead, Complete Genomics plans to establish its own in-house sequencing center in Silicon Valley, and ask researchers to send in their samples to get them sequenced for a fee. Complete Genomics just needed the latest round of financing to build its own proprietary machines to do the work at commercial scale.

“Our equipment is orders of magnitude better than anything the others guys make,” says Chad Waite, a managing director of OVP Venture Partners, and a founding investor in the company. “That’s the only way we can do it so cheap.”

Still, not everything has gone exactly according to plan. When I wrote about the company in October, Waite said Complete Genomics intended to start offering its commercial sequencing service starting in the second quarter of 2009, and pledged to deliver 100 full genome sequences to the Institute for Systems Biology in Seattle during calendar year 2009. The company fell behind on its schedule. Now Complete Genomics won’t be able to deliver all 100 sequences to the Seattle-based Institute this calendar year, Waite says.

Chad Waite

“We’re a bit delayed because the financing took a bit longer than we expected,” Waite says. “But we have already shipped a significant number of completed sequences to commercial customers.”

Skeptics have raised doubts about whether Complete Genomics really has superior technology, whether it can do the work so cheaply, and whether the data it produces will be full of errors. The company plans to answer these doubts in future scientific publications, Waite says. He wouldn’t say specifically how many sequences have been completed, or which customers have received them, although he noted that Leroy Hood of the Institute for Systems Biology and George Church of Harvard Medical School, a pair of giants in the genomics world, are scientific advisers to the company.

If Complete Genomics can show in a major scientific paper that it can do this many complete sequences at a high degree of accuracy, it will surely make headlines around the world. The actual number of genomes that have been sequenced is disputed, but at least according to a recent story in the New York Times, only eight have ever been completely done.

The latest financing should be enough to bring the company up to a commercial scale that can meet demand for many more sequences than that, Waite says, although it may not be the last financing for Complete Genomics. Waite raised the possibility of an IPO. I laughed out loud because I thought he was joking. He wasn’t.

“They’re probably bold enough to make an attempt in the not-so-distant future,” Waite says. “The question will be if it’s possible, and when.”

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If you’ve never heard of NaviNet, the builder of what the company claims is the nation’s largest real-time healthcare communications network, then the Cambridge, MA-based firm bears most of the responsibility, says company CEO Brad Waugh. The 11-year-old firm spent its first 10 years building the network and its customer base, and over the past year has the firm put a greater emphasis on telling health plans, doctors, and others about its multiple capabilities, Waugh says.

NaviNet helps doctors’ offices instantly access patients’ insurance information, such as their benefits eligibility and claims status, over the Web. So far it’s connected 770,000 doctors and other healthcare providers to the network, covering about 40 percent of the total market, according to Waugh. Big health insurers like Blue Cross Blue Shield, Aetna, and UnitedHealthcare are attracted to and use NaviNet’s services because they save money by accessing sharing information via the company’s Web portal rather than through costlier call centers, Waugh says. NaviNet makes the bulk of its money, he says, on transaction fees that insurers pay the firm to connect with doctors.

There are certainly other important details of NaviNet’s business to speak of. But the big question I had was how the company is adapting to the rapidly evolving landscape of the U.S. healthcare system, which is expected to undergo major reforms under the Obama administration. (Read on for my conversation with Waugh on this topic.) With the goal of driving down healthcare costs, among other things, the federal stimulus package passed earlier this year includes $19 billion in incentives for hospitals and practices that adopt electronic health records. While the exact rules governing how the money will be doled are still being worked out, Waugh says that his company already has the information “rails” over which the government and the healthcare system could move information smoothly and securely.

The 238-person company is already seven years into operating profitably, Waugh says, but because NaviNet is private, he doesn’t have to share actual financial numbers. He says the continued growth of the business will help support an eventual public offering. (I’m sure the company’s investors, such as Waltham, MA, venture firms …Next Page »

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Knome, a personal genomics startups located in Cambridge, MA, announced today the launch of its newest product, a partial genome sequencing package called KnomeSELECT. The service will cost $24,500 for individuals, but is discounted to $19,500 per person for couples and family groups. The firm’s more comprehensive whole-genome sequencing service, KnomeCOMPLETE, costs $99,000. Rather than decoding a person’s entire genetic blueprint, KnomeSELECT looks only at the exome, the protein-coding regions of the DNA.

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The genomic era hasn’t yet produced a revolution in personalized medicine, but it’s coming, says Harvard University geneticist George Church. Major tech companies like Google and Microsoft are making it their business to help people keep track of their health data—side-by-side with their genome sequence data (if they’ve got it). The adoption of these technologies has been slow to date, but combined with a new policy push for electronic medical records in Washington D.C., it just might move medicine away from one-size-fits-all approach that’s been the standard for so long, Church says.

That was the most interesting idea I picked up from talking with Church after he spoke at the Xconomy Forum on biotech innovation that we held recently at Biogen Idec headquarters in Cambridge, MA. People perked up their ears when Church talked about genomics and personalized medicine, since he’s one of the world’s leading thinkers on those topics, and has also worked hard to apply his ideas at a number of emerging biotech companies. The list includes Cambridge, MA-based Knome, a provider of genomic interpretation services; South San Francisco-based LS9, a renewable fuel company; and Mountain View, CA-based Complete Genomics, a gene sequencing company that has brought down the price of a genome to $5,000.

Here’s an edited account of my conversation with Church after the forum:

Xconomy: You mentioned earlier that you think Google and Microsoft are doing interesting things in terms of fostering greater usage of genomic data. How is that?

George Church: It’s not really about genomics so much as it is about personally controlled health records.

X: Ok, so what kind of impact does this have on your work?

GC: To the extent that these things are a controlled vocabulary, that’s important. To the extent that it makes people feel like they own their medical records, they can then share them more easily than filling out a form or asking the physician to give them something, and then getting a bunch of photocopied sheets that need to be transcribed onto a computer. This makes it much easier for people to share it for research.

I would love to see a wave of enthusiasm where people say ‘I’m going to share my genome and my medical traits, so that we can all benefit.’ Because right now it’s largely uninterpretable. But if everybody shares, it becomes interpretable. It greatly changes the ability to do research if the genome and the traits are both in the hands of the individual, and it really costs them nothing to push a button. But they need to think very deeply …Next Page »

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Despite an avalanche of new genomic information, the slope upward to applying it widely in medicine looks steep. This picture was laid out bluntly by biology pioneers Walter Gilbert and George Church at Xconomy’s biotechnology forum on Thursday, April 30. They saw big problems with both investment and public awareness. Their remarks were particularly striking to me because I’m currently writing a history of the genome project for Basic Books of New York.

Both panelists have been associated with Harvard for decades. Gilbert, now a photographer and investor, is the inventor of a Nobel-prize-winning DNA sequencing method in the 1970s and co-founder of what is now Biogen Idec. Church, also a pioneer in sequencing and advisor to and founder of several companies in the field, is best known lately for his Personal Genome Project.

Public participation, according to Church, is vital to spreading genomic medicine widely. Millions of patients and their doctors, he said, must be educated to see the relevance of genetic factors in illness. Then they must demand such information, help obtain it in the detail needed to give power to genetic tests, and use the results.

Gilbert focused on the now-classic dilemma of personalized medicine. This is the reluctance of large drug companies to study and push genetic stratification of patients into those likely or unlikely to benefit from a particular drug or dosage. Perhaps, he said, insurance companies would see the point of finding out whether a cancer patient would be helped by a treatment that costs $50,000 a year.

Both saw needs to go around existing systems. The investment system, Gilbert said, is “broken.” Venture capitalists, and many company founders, now demand an exit in three to five years. “It’s hard to put money in for 20- to 30-year periods.” This is a major obstacle to …Next Page »

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Some of biotech’s most innovative drugs emerged under the worst financial conditions. Two big breakthroughs in the 1990s, Enbrel for rheumatoid arthritis and Rituxan for lymphoma, came from small biotech companies that toiled for years, and survived brushes with extinction, before they made it.

This history lesson came up in conversations I had with entrepreneurs after the Xconomy Forum: Tomorrow’s Biotech—Innovators and Innovations, which we held yesterday at Biogen Idec in Cambridge, MA. The people who enter this business need a rare combination of intellect and tenacity to survive in a business where 9 out of 10 drugs that enter clinical trials fail, and where it takes more than a decade and hundreds of millions of dollars to develop a drug, even in good times. So it was fascinating to hear people describe the grim realities of the economy as simply another obstacle they need to overcome—and not an insurmountable one.

Startup founders and CEOs participating in the forum covered a lot of ground about creative ways biotech companies are seeking to clear these hurdles by raising money, improving the odds in drug development, and lowering costs. Of course there’s no one simple way to build and sustain a new company, and indeed the forum highlighted some completely opposite strategies.

Meanwhile, the heads of some of the most innovative programs at public biotechs—Biogen Idec’s Gilmore N. O’Neill, Genzyme’s Sam Wadsworth, and Vertex Pharmaceuticals’ Eric Olson, moderated by GlaxoSmithKline’s Michelle Dipp—shared their perspectives on what it takes to foster new ideas and treatments in the public-company context. (FYI, none of them officially condone submarine projects, wink wink nudge nudge.) We also heard from some pioneers of the biotech industry—Walter Gilbert and George Church—during a keynote chat, although I’m saving up highlights from an interview with Church for next week, so watch this space.

Thanks to all who joined the conversation yesterday. And if you missed it, here are some of the highlights from the entrepreneurs at the Forum:

—Peter Hecht, CEO of Cambridge, MA-based Ironwood Pharmaceuticals, talked about his secret for being able to raise $281 million over the past 11 years to build his company, which now has 160 employees. “We’re crazy-passionate about building a great company and doing it over the long haul,” he said, with a sense of purpose that made it sound like more than a platitude.

This guiding principle has enabled Hecht to pull together investors like Polaris Venture Partners and Venrock Associates to support the company—without agitating for a quick acquisition to get fast returns. By sticking with this consistent …Next Page »

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At a time when early-stage investment dollars are hard to come by, the state of Massachusetts is giving several startups their first taste of the commonwealth’s plan to invest $1 billion in the life sciences industry over a 10-year period. The Massachusetts Life Sciences Center, the agency in charge of implementing the $1 billion plan, is revealing today that it has awarded $3.4 million in loans to seven life sciences startups.

These startups will likely require millions of dollars more to bring new drugs, devices, or other products to the market. The loans are meant to help startups do early research to show that their experimental products have a shot at working—and the state hopes they’ll also make venture capitalists and other institutional investors more willing to pump in their own capital.

The Massachusetts-based startups selected to receive the state loans are all firms that have yet to close a round of venture capital. In all but one case, these startups are receiving $500,000 loans that are due to be paid over five years with an annual interest rate of 10 percent, agency spokesman Angus McQuilken tells me. (One of the seven loan winners, medical devices developer Wadsworth Technologies, is borrowing $400,000 from the state program because that’s the loan amount it requested.)

The state plans to make multiple rounds of such loan awards per year, he adds. The state also launched a program last year to attract institutional investors such as large life sciences companies to provide matching funds for the program, and the first company to participate is healthcare products giant Johnson & Johnson (NYSE:JNJ), which has agreed to contribute $500,000 to the program over a two-year period.

Here’s the roster of the loan recipients, described in the words of the Massachusetts Life Sciences Center.

Eutropics Pharmaceuticals—Boston

Eutropics develops drugs for treating aggressive forms of myeloma, lymphoma, leukemia, and other cancers. The company’s initial target is myeloid cell leukemia-1, a key member of the Bcl-2 family of proteins, which are thought to be involved in resistance to conventional forms of cancer treatment. The firm has identified an early lead compound that selectively inhibits the activity of myeloid cell leukemia and is effective in a lab mouse with B-cell lymphoma.

Good Start Genetics—Boston

Good Start Genetics is a molecular diagnostics company utilizing a proprietary process developed by team members from biotech luminary George Church’s lab at Harvard Medical School. The startup is working to develop a low-cost, pre-pregnancy test for 50 genetic disorders that will replace single-disorder tests currently on the market, which would give parents early information to help ensure healthy children. The firm aims to offer a sequencing-based test that is more accurate, more comprehensible, and more affordable than today’s standard tests.

InVivo Therapeutics—Cambridge, MA

InVivo is a medical device company targeting the market for treating traumatic spinal cord injuries with technology based on research by MIT inventor Bob Langer and Jay Vacanti, a physician at Massachusetts General Hospital and Children’s Hospitals in Boston. The firm’s technology (which Xconomy covered last year) is intended to treat traumatic spinal cord injury by utilizing biomaterials with combinations of drugs and cells. The firm is currently conducting a second round of non-human primate trials and has requested Food and Drug Administration permission to embark on human trials within the year.

Pluromed—Woburn, MA

Pluromed is pioneering injectable plugs to improve outcomes in cardio-thoracic surgery. The firm received the 2008 European Association of Cardio-Thoracic Surgery Techno-College Innovation Award for the most important technological breakthrough in any area related to thoracic and cardiovascular surgery for its LeGoo Internal Vessel Occluder. Pluromed plugs are based on “reverse thermosensitive” polymers that are liquid at low temperatures and gel at body temperature; these plugs are completely reversible via cooling and completely dissolvable. When injected into the body, the plugs block off blood flow to provide surgeons with a bloodless field. When cooled, the plugs liquefy and dissolve into the bloodstream. Unlike competing technologies, Pluromed’s plugs allow surgeons to remove a tumor while normal blood flow is maintained in the rest of the organ.

Spectra Analysis—Marlborough, MA

Spectra is a supplier of molecular spectroscopy systems and applications for chromatography. Its current products focus on real-time connection of infrared spectroscopy to gas and liquid chromatography. The firm’s DiscovIR systems make it possible to collect full infrared spectra for each component in a separation, either as a standalone or in parallel with mass spectroscopy.

Wadsworth Technologies—Westborough, MA

Wadsworth is a medical device entity targeting the wound closure market. Wadsworth uses next-generation adhesives combined with intelligent engineering to form a painless system that can be rapidly placed with optimal healing results. Its lead product, the “Dermaloc Wound Closure System,” applies tension to skin wounds to close them without anesthesia or sutures, resulting in a novel, painless, rapid, needle-free, and durable wound-closure product. The system is currently in clinical testing.

Wolfe Laboratories— Watertown, MA

Wolfe Laboratories provides assay development, formulation development, process development, and other services to the biotechnology and pharmaceutical industries. Wolfe Labs offers a variety of pre-clinical services, including pre-formulation and formulation development, analytical method development and characterization, among several other services. Wolfe hopes to use the state loan to help build a new manufacturing facility focused on aseptic fill finish services and the manufacture of innovative biologic and cytotoxic drugs. The Boston Chamber of Commerce named Wolfe Labs founder Janet Wolfe as Boston’s Entrepreneur of the Year in 2008.

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My mental soundtrack the last few weeks has been heavily weighted toward Ziggy Marley’s cheestastic “Tomorrow People,” and I’ll tell you one of the reasons why: I’m getting really excited about our upcoming Xconomy Forum, called Tomorrow’s Biotech—Innovators and Innovations.

I’ll confess to not quite getting what Mr. Marley meant by this idea of tomorrow people (anybody know?), but what my colleagues and I were thinking was there is a group of people who are right now laying the foundations for the future of New England’s life sciences industry, and who are building the technologies and companies that will utterly transform the way diseases are diagnosed and treated in the years to come. We wanted to gather those people together, and to foster a lively and open discussion among members of the local life sciences community about just what tomorrow could—and should—look like.

So that’s exactly what we’re doing, next Thursday, April 30. Biogen Idec has graciously provided us some beautiful space at its Building 8 in Cambridge Center for the forum. To provide some insight into the world of small-company innovation, this afternoon event will feature case studies on a couple of the most exciting startups in town (Zafgen and Forma Therapeutics), one on an equally interesting startup (Adimab) from New Hampshire, as well as one on Ironwood Pharmaceuticals—a smallish company perhaps on the cusp of some serious bigness. What’s more, three of the region’s most important public life sciences companies—Biogen Idec, Genzyme, and Vertex Pharmaceuticals—have agreed to lift the veil on some of their most cutting-edge programs. And two of biotech’s founding fathers—Wally Gilbert and George Church—will sit down for a chat with BU’s Jim Collins, a MacArthur Genius award winner and, like Church, an Xconomist.

There will be plenty of time during the forum and at the reception that follows it for attendees to mix and mingle with one another. Space, on the other hand, is dwindling—so if you want to register for the event the time for that is probably today. So to register, go here. To see the full agenda, go here. And for more on Mr. Marley’s thoughts about tomorrow and its people, go here—but I’m warning you, it’s sticky, sticky stuff.

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These probably aren’t the rosy endings that VC backers had in mind when the promising Boston-area life sciences startups Magen BioSciences and Codon Devices were launched in recent years. But the news today is that Waltham-based Magen has been sold for less than it raised in its first round of financing, and the Boston Globe reports that Codon Devices is quietly shuttering its operations in Cambridge.

Magen, formed in 2006 to develop superior treatments for skin disorders, had all the makings of a future success story, with support from top Boston-area venture firms and scientific luminaries. Yet Wilmington, N.C.-based contract research firm PPD (NASDAQ:PPDI) says today that it has bought Magen for $14.5 million. That falls short of the $15.4 million that Magen tied down in its Series A round of financing. Lexington, MA-based Highland Capital led that maiden round, which included contributions from Flybridge Venture Partners in Boston and Lux Capital in New York, among other firms. Magen’s board of directors boasts some heavy hitters in the local biotech scene: Christoph Westphal, CEO of Cambridge biotech Sirtris; Rich Aldrich, founder of biotech hedge fund RA Capital in Boston; Phillip Sharp, a Nobel Laureate in physiology and medicine and a co-founder of Cambridge-based biotech Biogen Idec (NASDAQ:BIIB).

Codon, a maker of synthetic DNA fragments and other genetic materials, was similarly well-pedigreed. The firm’s scientific founders include Harvard Medical School sequencing guru George Church, MIT’s Drew Endy and Joseph Jacobson, and the University of California, Berkeley’s Jay Keasling. Codon’s venture backers included top names in life sciences investing such as Flagship Ventures, Highland Capital Partners, Khosla Ventures, and Kleiner Perkins Caufield & Byers. But lots of financial support, including a $31 million Series B financing wrapped up last year, apparently wasn’t enough to advance Codon into profitability—nor, evidently, were Codon’s efforts last June to reorganize and cut staff levels to focus resources on product development partnerships. In the end, it’s unclear how much of the money invested in Codon Devices was recouped.

Of course, the closing of Codon and the lackluster sale of Magen aren’t isolated incidents. In recent months, Waltham-based Dynogen Pharmaceuticals filed for bankruptcy protection after running short on the cash needed to develop drugs for gastrointestinal disorders like irritable bowel syndrome. And Foxborough, MA-based Cyberkinetics Neurotechnology Systems called it quits after its coffers ran dry while the company was developing a device to regenerate nerve cells in patients with severe spinal cord injuries.

At least for Magen, there’s still a pulse. Magen board members and investors did not reply to my requests for comment about the company sale this morning, but a spokeswoman from PPD says the research firm intends to keep the Magen operation and most of its workers in Waltham. Magen scientist Sandra Luikenhuis has joined PPD as executive director of dermatology, and is expected to lead development of the drug compounds that PPD is acquiring in its buyout of Magen. Magen licensed the compounds from drug giant Eli Lilly in 2007.

In a related development, PPD is selling its Piedmont Research Center business in North Carolina to Wilmington, MA-based contract research firm Charles River Laboratories International (NYSE:CRL) for $46 million in cash. PPD says that the sale is expected to offset the impact of its purchase of Magen.

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San Diego’s Illumina has a pretty amazing story to tell about exponential growth. The maker of genetic analysis tools has beaten or matched Wall Street earnings forecasts for a dozen quarters in a row. It has grown from 239 employees in 2004 to an estimated 1,604 by the end of this year. But when it invited investment analysts to its headquarters yesterday for an in-depth rundown on the state of the company, Illumina’s stock fell 5 percent on another lousy day for the markets.

The Wall Street crowd apparently thinks it’s a tough economy for selling super-sophisticated genome analysis machines, which cost more than $450,000 fully-equipped, plus as much as $200,000 a year in consumable supplies to keep them running. Since Illumina (NASDAQ: ILMN) did a 2-for-1 stock split on Sept. 23, its value has sunk 33 percent, to $27.71 at the close Thursday.

CEO Jay Flatley painted a broad picture of what Illumina does in his opening remarks at analyst day, which I watched on a webcast. It makes tools for high-speed DNA sequencing, genotyping of a segment of an individual’s genetic code, and tests that examine to what extent an individual’s genes are dialed on or off. By bringing down the cost of full genome sequencing to less than $100,000, Illumina is one of the companies that has been ushering in the era personalized medicine, along with its competitors, Foster, City, CA-based Applied Biosystems, Roche, and Cambridge, MA-based Helicos Biosciences. Illumina’s new goal is to bring that price down to $10,000, Flatley said.

“It’s within our sights,” he told analysts.

Getting there isn’t easy. Illumina has had struggles to manufacture its arrays to keep up with demand, mostly from government, academic, and hospital labs, Flatley says. It placed special emphasis—unusual for a Wall Street presentation—on its initiatives to recruit and develop enough talented workers to keep up with its rapid-fire growth.

To give a sense of where that growth is coming from, Illumina brought in Peter Gregersen of the Feinstein Institute for Medical Research on New York’s Long Island. Gregersen, who does genetic research for autoimmune diseases like rheumatoid arthritis, gave a fascinating talk about how the new tools are enabling him to ask new questions.

Autoimmune diseases are a bunch of conditions in which the immune system goes haywire and starts attacking healthy tissue instead of foreign invaders like viruses and bacteria. These diseases affect millions of people—about one in 20 people in the country—with rheumatoid arthritis, lupus, multiple sclerosis, Type 1 diabetes, and inflammatory bowel disease, to name a few, Gregersen said. Their causes aren’t really known, although researchers suspect multiple genes play a role. For rheumatoid arthritis, about 10 genes are thought to be responsible, and for lupus it’s 20, he said.

By looking broadly at the genetic profiles of patients with these diseases—and with costs coming down to the point where large numbers of patients can feasibly be sequenced—new sequencing tools will lead researchers to much deeper understanding of these diseases. “This is an engine of hypothesis generation,” Gregersen said. …Next Page »

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The Bill & Melinda Gates Foundation is doling out smaller chunks of cash to spur bigger thinking. The world’s largest private foundation is announcing today it is awarding 104 grants to scientists—at $100,000 apiece—to support off-the-wall ideas that have potential to shake up the conventional wisdom in global health.

The Seattle-based foundation hopes to pump some life into research on HIV, tuberculosis, and other infectious diseases. This is part of what the foundation calls “Grand Challenges Explorations.” The plan is to get researchers to fill out concise, 2-page proposals for an “untried or unproven” idea, according to a statement. These are the sometimes wild ideas that can’t get funding through the National Institutes of Health’s peer review system, much less thrill venture capitalists. The hope is that the foundation can speed up its review times, and put its money to work faster in the field on some of these far-out concepts, and maybe spark progress to convince other funding agencies to pile on later.

The snappier application process—which kept reviewers blinded to a scientist’s credentials and reputation—appears to have encouraged people to put forward some wildly imaginative ideas. One scientist, Marka Szabolcs of Columbia University, proposes preventing malaria transmission with a “mosquito flashlight” that disorients the bugs. Suzanne Fleiszig of the University of California, Berkeley wants to study natural defenses of the eye to see if it leads to powerful new antimicrobial drugs. Another researcher in Japan, Hiroyuki Matsuoka, thinks it can be possible to turn mosquitos into “flying syringes” that deliver vaccines when they bite people.

“We were hoping this program would level the playing field so anyone with a transformational idea could more quickly assess its potential for the benefit of global health,” said Tachi Yamada, president of global health at the Gates Foundation, in a statement issued at the Grand Challenges annual meeting in Bangkok. “The quality of the applications exceeded all of our expectations.”

The 104 grant winners come from 22 countries. A sizable chunk of them hail from Xconomy network cities, with seven from Boston and five from Seattle, but none from San Diego. (Get ‘em next time, SoCal.) Here’s a rundown of the local grant winners:

—Francois Baneyx of the University of Washington won his award for an idea called VACAS, or vaccinating adjuvant core antigen shell nanoparticles.

—James Kublin of the Fred Hutchinson Cancer Research Center has an idea for studying fast-growing sporozoites (e.g., cells that develop in a mosquito’s salivary glands) for producing a new type of whole cell vaccines.

—Pradipsinh Rathod of the UW received support for strategies to block hypermutagenesis in malaria parasites.

—Keith Jerome of the UW is going to test his ideas for homing endonucleases that might cure dormant HIV infections.

—Dmitry Shayakhmet of the UW will study elimination of macrophage cells infected with tuberculosis.

The Boston contingent includes:

—George Church of Harvard University (an Xconomist) will use the cash to pursue studies of the genomes of antibiotic resistant bacteria.

—Tayyaba Hasan of Harvard will test an idea about using light therapy for leishmaniasis, a parasitic infection.

—Roy Kishony of Harvard will study drugs that invert selection for resistance.

—Sarah Fortune of Harvard will look at chromatin condensation as a master switch to put pathogens into latency, or dormancy.

—Kim Lewis of Northeastern University will capture dormant tuberculosis cells from a mammalian host.

—Ali Munawar of Cambridge, MA-based Molecmo Nanobiotechnologies is planning to target the ways HIV gets ferried inside cells as an antiviral approach.

—Shi-hua Xiang of Dana-Farber Cancer Institute in Boston will look at mucosal delivery and retention of anti-HIV agents using lactobacillus, a type of bacteria that turns lactose and other sugars into lactic acid.

Lastly, we spotted a prominent HIV researcher now in Oregon, who used to be at the Seattle Biomedical Research Institute:

—Nancy Haigwood of Oregon Health and Science University received a grant for programming neutralizing antibodies for HIV vaccines.

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Ten prominent players in science and technology—many of them local to the Boston area—are reportedly today going to reveal about 20 percent of the genome sequences, along with their medical records on the Web. The group, including Harvard Medical School’s George Church and legendary venture capitalist Esther Dyson, are the first volunteers in Church’s Personal Genome Project, which is aiming to sequence 100,000 people’s genomes as a way of helping understand the links between gene variations and human health and sppeding progress toward more individualized health care.

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It’s hard to believe Leroy Hood—a guy busy enough to employ not one, but two full-time executive assistants—is turning 70 today. But it’s true.

This milestone seemed to be as good a reason as any to catch up with the biotechnology pioneer. So I stopped by his office at the Institute for Systems Biology (ISB) along North Lake Union in Seattle for a 45-minute interview last month. I gathered some revealing insights into his life, and walked away thinking that while business executives his age are usually put out to pasture, Hood has more fire in the belly than ever.

“I’m doing the most ambitious things, by far, that I’ve ever done in my career. Right now,” Hood says.

For those who don’t already know, Hood is recognized around the world for leading the team at Caltech in the 1980s that invented the high-speed DNA sequencing machines that made the Human Genome Project possible. Hood has won some of the world’s highest honors for invention, like the Lemelson-MIT Prize, Kyoto Prize, and Lasker Award. He’s also co-founded 13 companies by his count in a recent essay, including Amgen, Applied Biosystems, and Rosetta Inpharmatics.

To celebrate his life, and to dream of what’s still to come, about 300 friends are gathering in Seattle tonight for an invitation-only gala dinner at the W Hotel downtown. Some of biology’s biggest names, like Harvard’s George Church and Stanford’s Irving Weissman, are scheduled to be there. There will also be a 10-minute video tribute to Hood’s life, featuring interviews with his family, colleagues, and a video appearance from Microsoft chairman Bill Gates, who recruited Hood to the University of Washington from Caltech in 1992.

This will not be about a bunch of graybeards telling old war stories (although I do hope to hear a few good ones when I stop by there tonight.) Much of the discussion will revolve around ideas being pursued at Hood’s ISB, a nonprofit research center he co-founded in 2000 with Alan Aderem and Reudi Aebersold. It’s designed to be a hothouse for cross-disciplinary scientists trying to push the frontiers of biomedical research, largely by using computers to sort through vast amounts of genomic data. Hood has been busy forming all sorts of collaborations this year with partners who have a need for ISB’s skills.

Just in the last few weeks, ISB has formed a partnership with Swedish Neuroscience Institute in Seattle to study the genomes of brain tumor samples, and has made a deal to fully sequence more than 100 human genomes in 2009 with Mountain View, CA-based Complete Genomics. Hood has unveiled plans to Xconomy for a new company called Integrated Diagnostics which will spot tiny cancers in the blood while they are at their most treatable stage. And just yesterday, ISB announced another big deal, a $14 million, five-year grant from the National Institutes of Health to study how the immune system interacts with dangerous pathogens like H5N1 bird flu.

Like the voter in New Hampshire who famously asked Hillary Clinton about how she holds up on the campaign trail, I wanted to know how Hood does it, at age 70. …Next Page »

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It’s getting cheaper by the day to sequence the entire string of 6 billion chemical units of DNA that make up an individual human being. Yesterday, Complete Genomics of Mountain View, CA unveiled plans for what amounts to a democratization of genomics. It will offer a service to sequence full human genomes for just $5,000, beginning in the second quarter of 2009.

At Xconomy, we normally focus on companies based in Boston, Seattle, and San Diego, but we couldn’t resist digging into this one, because it has multiple connections to our network cities. Complete Genomics raised its seed capital in 2006 from OVP Venture Partners in Kirkland, WA, and Enterprise Partners in San Diego. It also counts a pair of Xconomists, Leroy Hood of the Institute for Systems Biology in Seattle, and George Church of Harvard Medical School, as scientific advisers.

So we tracked down OVP managing director (and Xconomist) Chad Waite to find out why he decided to invest in this technology versus all the other sophisticated instruments made by companies like Applied Biosystems, Illumina, 454 Life Sciences, and Helicos Biosciences. (He proudly pointed out that his Harvard Business School connection to CEO Clifford Reid gave him the inside track on this investment, and he invited Drew Senyei of Enterprise in on the action, but more on that later.)

It turns out Waite was sold on Complete Genomics because it has a fundamentally different vision of the market from its rivals. Instead of trying to sell a machine to pharmaceutical companies and top academic labs for hundreds of thousands of dollars, Complete Genomics plans to keep the work in-house on its own proprietary machines and offer sequencing as a service. The company plans to open 10 sequencing centers around the world over the next five years, with the capacity to sequence 1 million complete human genomes. It will have enough bandwidth to sequence an entire genome for $5,000 in about four days, compared with $100,000 and six weeks to six months on currently marketed instruments, Waite says.

“We’re disruptive on technology, and on the business model,” Waite continues. “We’re not going out and trying to sell million-dollar machines. Is there really a competitive advantage for a pharmaceutical company to have the machine? The advantage for them is in the data. They want the data.”

So how might that be really useful for companies or academics? At that high speed and low price, it’s conceivable that drug companies will want to sequence every patient who enters a clinical trial to provide clues as to why some patients respond differently than others to experimental drugs, Waite says. Or, they might want to run big experiments that compare the genomes of 1,000 patients with diabetes to 1,000 other people as healthy controls, to look for tiny genetic variations that might offer clues. They could look at a bunch of prostate cancer tumor samples to try to find genomic markers that explain why the disease spreads more quickly in some people than in others, Waite says.

These concepts are truly mind-boggling when you look at the recent history of …Next Page »

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A prize for a prize. That’s essentially the reason a trio of heavyweights—Ray Kurzweil, Xconomist George Church, and Saul Griffith—will be on hand at MIT this afternoon, as they help announce a $25,000 prize for whomever comes up with the best idea for a $10 million energy and environment prize to be awarded by the X Prize Foundation.

More specifically, the $25K will be offered for the best YouTube video proposal for the big kahuna energy prize. The contest itself will be formally announced at a forum called “Seeking Radical Breakthroughs in Alternative Energy—What I Would Advise the Next President,” which will be held at 4:30 this afternoon in MIT Building 34, room 101 (you can find a few more details here).

The competition for the $25K prize should be tough. In addition to tapping various experts and its public YouTube call, the foundation is hosting the X PRIZE Lab @ MIT, a class this fall that focuses on the energy and environment sector. According to a press release, “The semester-long X PRIZE Lab class is asking students to conceive potential X PRIZEs that could help solve aspects of global warming and resource depletion. Last semester, the X PRIZE Lab @ MIT focused on healthcare. Students in the class proposed a Tuberculosis (TB) Diagnostics X PRIZE that would have the potential to save more than 1.6 million lives per year. The TB Diagnostics prize proposal was awarded a grant and is now being developed into an official X PRIZE.”

Here are the guidelines for your YouTube video submissions.

The winning video must answer the following three questions:

1. What is the specific prize idea?

2. What is the Grand Challenge or world-wide problem that you are trying to solve?

3. How will this prize benefit humanity?

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You know you’ve arrived when Google invites you to headquarters in Mountain View, CA for a camp with 200 leading scientists, techies, and writers. Nitin Baliga, a rising star at the Institute for Systems Biology in Seattle, got the coveted invite to something called Science Foo along with better-known names like inventor Dean Kamen, technology investor Esther Dyson, Harvard biologist George Church, and Carl Dietrich of flying-car fame.

What does Google care about some young biologist? More on that later. First, we’ll take a stab at explaining what Baliga’s team has done. It has showed that with mathematical algorithms, it’s possible to predict how 80 percent of all the genes in a microbial cell will respond to a variety of environmental assaults, such as gamma radiation and certain metals. Baglia also developed new software for handling genomic data, called Gaggle (hmm, wonder why that sounds so familiar?) that has attracted many users, said Leroy Hood, president of the Institute for Systems Biology (and an Xconomist.)

“Nitin has the capacity to integrate first-rate biology and use it to drive the development of pioneering software for handling biological data,” Hood said in an e-mail. “He has a deep understanding of both areas. Few examples of scientists exist with these unique and integrated capacities.”

Baliga, 36, a native of Mumbai, India, got his doctorate in microbiology at the University of Massachusetts-Amherst, where he got to know Hood’s research team through a collaboration. He inquired about a job at the then-fledgling ISB as a postdoc in 2000, and got it. He has since worked his way up to senior scientist, assistant professor, and now associate professor.

When I visited Baliga at his office, he said the agenda for the Google event, which is co-hosted by Nature Publishing and O’Reilly Media, seems pretty loose, with lots of free time for socializing, so he’s not sure what to expect. “It’s like a Secret Society. I still need to learn the handshake,” he joked.

One thing Baliga wants to find out is whether people outside biology fully understand the implications of the kind of research he and peers are doing. “I wonder how people there perceive the revolution in biology, and how it affects their own lives and can let them control their own health in the future.” The vision is that someday a scientist could sequence a person’s genome and combine that information with the his or her environmental history (spent any time as a coal miner? lived above a dry cleaner?) to build a model that could predict the person’s chance of getting certain diseases. It’s possible you could find out you’re the kind of coal miner who is more likely to get lung cancer, given your genes—and that information could guide your healthcare (and perhaps even career) decisions.

I asked Baliga if the research has prompted him to change any personal habits, like quitting drinking coffee because of how it might interact with his genotype. He laughed, because the work is a long way from being applied like that—at this point we are just talking about predicting how genes respond in microbes, after all.

So why does Google want to see what’s hot in biology? For one thing, Hood has been to the Googleplex to meet with co-founders Sergey Brin and Larry Page several times, Baliga said. For another, Brin’s wife, Anne Wojcicki, is a co-founder of 23andMe, a Google-backed startup in Mountain View, CA that does personal DNA analysis on more than 80 traits and diseases. Apparently, Google sees a need for sophisticated search algorithms that can separate signal from the noise in vast databases of genomic data. “Google is interested in predictive medicine,” Baliga says.

We’ll have to follow up with Baliga when he returns to Seattle to see whether Brin himself tries to pick his brain.

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